NWR: Tax Related Question

cheerinchick0822

I had a question about taxes and I noticed from other posts that quite a few of you are accountants and could probably help me.

I am a nanny for a family and they recently asked me for my SS# and address because they were doing their taxes. They have three children and I am assuming this is some sort of write off. I get paid either in cash or by their personal checks so I don't have to pay taxes every month. I was just wondering if I am going to have to pay tax money or if this is just a way for them to get a bigger tax refund.

TIA!

ThePinkSuperhero

Did they say why they needed your address and SS#?  It kinda sounds like they're going to give you a 1099, in which case you would be responsible to pay taxes on what they reported you made for the year.

SarahPLiz

Yes, they are going to report to the IRS what they paid you.They have to provide your SS# in order to get the deduction.  Whether they report it or not, you are supposed to report it as income. Since you know they are reporting it, you had better report it!

BlondeBride88

Not reporting extra income is illegal. Even if you are paid in cash.

I know, nobody really reports the income in order to avoid paying taxes on it, but technically you should.

Like pp said above, it sounds like a 1099. They will report your income. You should report the income.

tidetravel

Regardless of whether or not you are paid cash or check, you are still getting paid and that is taxable income.  Just because they aren't withholding money for taxes doesn't mean that you just "don't have to pay them."  It DOES mean that you will owe taxes on your income at the end of the tax year.

SarahPLiz

Even if its not a 1099, they still have to give the IRS your SS# to qualify to deduct dependent care expenses. So you really need to report it. If you haven't kept records, you should ask them how much they are reporting.

cheerinchick0822

This may be a dumb question but... how do I report the income? I have always had jobs in the past where I was given the form showing how much I had made and I always did my taxes myself with the forms I get at the public library and mail in. I am a college student so it has never been an entirely large amount. By reporting it, do I just fill out the simple tax form and ask them how much I made?

SarahPLiz

yes, report it as income on line 1, just like you would if you got a W-2. YOu can still use a 1040EZ if you don't have any funky deductions and only one job.

YOu can file for free online at www.taxactonline.com.

cheerinchick0822

Also, is there a way to figure out how much I would owe? I am sorry if these questions are dumb.. I have never had to figure these things out because I have always paid taxes per pay check.

SarahPLiz

You can use the tax tables in the instructions to the 1040, or sign up and use the online one. It will compute it for you, and help with other deductions and credits you may have.

cheerinchick0822

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_nwr-tax-related-question?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:fb17bcc4-7e3b-457d-8ddc-af6184d90153Post:e79606c2-c137-4db5-9571-ff3a5bceaef7">Re: NWR: Tax Related Question</a>:
[QUOTE]If you are no one else's dependant, and your income is less than about $9K, you probably won't owe anything. If you are still your parent's dependent, then you waill owe tax on anything over $3650, assuming you have no other income of deductions
Posted by SarahPLiz[/QUOTE]


What time frame is considered this year's taxes? Does it start with last April and go to the time taxes are complete?

SarahPLiz

Its the calendar year, so money paid to you between January 2009-December 2009. You don't have to file until April 15.

ETA: Your dependency status is as of the end of the tax year. If you are an undergrad, under age 24, I think, your parents may still claim you as a dependent. Check with them. If they are paying for your school, its very likely that they claim you as a dependent so they can get a write off for your tuition.

cheerinchick0822

I am still a dependent of my parents and they are working on their taxes right now. Do I need to tell them the amount of money that I made so they can include it on their taxes?

SarahPLiz

Maybe you could do that, but there are special provisions. Talk to them about it and let them look through the 1040 instructions. There are special instructions for declaring a child's income on the parents' return, but I am not familiar with them.

www.irs.gov is your friend.

GOod night and good luck!

cheerinchick0822

Okay, Thanks so much for your help and sorry for so many questions.

I really appreciate it!